BERKADIA STUDENT HOUSING NEWSLETTER 2021
a Berkshire Hathaway and Jefferies Financial Group Company
STUDENT HOUSING SALES
Sales Volume Sales during the fourth quarter of 2020 accounted for more than half of all last year’s transactions and dollar volume. This upswing in activity during the last three months is a positive portent for the future of the student housing sector. The initial decrease was the result of several factors related to the COVID-19 pandemic: early university shutdowns, stringent debt requirements, enrollment shortfalls due to online-learning policies and general uncertainty. The result was the student housing segment decreased 30% in dollar volume and 40% transactionally year-over-year. As transactions dropped in all product types, the largest pullback was among individual transactions. Student housing portfolio sales in 2020 were up 4.0% from the prior year’s dollar volume and accounting for more than one-third of total sales volume. We fully expect the debt markets and sales volume to continue to rebound as in-person learning resumes and economic changes fuel enrollment.
Individual Sales
Portfolio Sales
Total Property Count
2019
2018
2017
2016
2015
2014
2013
Source: Berkadia; Real Capital Analytics; and CoStar, based on properties and portfolios ~$2.5mil or greater. * As of February 1, 2021
Average Price Per Bed The average price per bed increased 7.5% from 2019 to $77,634 in 2020. This increase was underpinned by 40 transactions
$43,035
$46,931
$48,590
$52,870
$59,301
$65,512
$64,619
$70,596
$75,791
$72,207
where price per bed was more than $100,000.
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020*
Source: Berkadia; Real Capital Analytics; and CoStar, based on properties and portfolios ~$2.5mil or greater. * As of February 1, 2021
National Price Per Bed by Distance
$51,498
The overall average price per bed
$48,280
increased in 2020, with a price premium for student housing communities
$106,088
closest to campus. From 2019 to 2020,
$91,656
the average price per bed rose 2.5% among student housing communities within 0.5 mile of a campus. The sharpest increase was among properties located between 0.6 mile and one mile of campus, rising 49.2% yearover-year.
≤ 0.5 Mile 0.6 to 1 Mile 1.1 to 2 Mile > 2 Mile
Source: Berkadia; Real Capital Analytics; CoStar; and Google Maps. Sample size 133 properties. * As of February 1, 2021
STUDENT HOUSING SALES | CAP RATE Cap Rate Overview The average student housing cap rate decreased 20 basis points (bps) year over year, to 5.5% in 2020. Reflecting a cap rate 30 bps lower than the preceding five-year average. The overall decrease reflected the trend among market-rate multifamily product in 2020. The spread between conventional multifamily and student housing held year over year at 30 bps. For properties located within two miles of Power 5 schools, sales had an average cap rate of 5.35%, more than 10 basis points lower than other student housing properties sold within a similar range of other higher education institutions.
Source: Berkadia; Real Capital Analytics; and CoStar, based on properties and portfolios ~$2.5mil or greater. Weighted cap rates were not available, so a straight-line average for cap rates was used.
STUDENT HOUSING SALES | TOTAL SALES By the Numbers
$4.5b
$194k
TOTAL SALES VOLUME
$78k
AVERAGE PRICE PER UNIT
AVERAGE PRICE PER BED
146
5.51% AVERAGE CAP RATE
NUMBER OF PROPERTIES SOLD
Investment Activity For the second-consecutive year, private buyers comprised the largest share—41%—of acquisition volume in 2020. However, their share is down nearly 9% from 2019 as international buyers and institutional buyers picked up activity in 2020. International buyers’ volume is up nearly 8% from 2019, while institutional buyers increased 5%. This upward trend signals a revitalized appetite for the strong yields within the Student Housing industry. Increases in the both the foreign and institutional buyer levels points to a return to normalcy from 2019 shortfalls among international and institutional capital, even amid the challenges faced by the pandemic in 2020.
Private
Public Listed/REITs
Cross-Border
Institutional
1%
4%
User/Other
3%
1% 29%
32%
20%
25%
37%
50% 4%
2017
23% 0%
10%
23%
2016
2% 6%
62%
37%
4%
2018
2019
Source: Berkadia; Real Capital Analytics; and CoStar, based on properties and portfolios ~$2.5mil or greater. *As of February 1, 2021
2020*
STUDENT HOUSING SALES | TOP BUYERS BY DOLLAR VOLUME RANK
BUYER
1
Global Student Accommodations Group
2
Korea Inv Securities, Landmark Properties, Ocean West, Tiger Alternative Investors
3
TPG Real Estate/Cardinal Group
4
Timberline Real Estate Ventures
5
Greystar
6
Student Quarters
Source: Real Capital Analytics and Co-Star. Based on properties ~$5mil or greater. * As of February 1, 2021
STUDENT HOUSING SALES | TOP INDIVIDUAL PROPERTY NAME
CITY
STATE
UNITS
YEAR BUILT
BEDS
Sol at West Village
Davis
CA
663
2011
2,289
The Varsity at College Park
College Park
MD
258
2011
901
Retreat at Orlando
Orlando
FL
221
2014
894
Rush
Charlotte
NC
332
2018
887
Northpoint Crossing I &II
College Station
TX
627
2014
841
Quarry Trail
Knoxville
TN
210
2008
840
Stadium Village
Marietta
GA
198
2015
792
Quantum at West Call
Tallahassee
FL
225
2018
752
Heritage Apartments
Columbus
OH
228
1962
685
Tempe Station
Tempe
AZ
400
2000
684
NXNW Tallahassee Florida
Tallahassee
FL
219
2012
679
Skyloft Austin
Austin
TX
212
2018
674
The Dean
Champaign
IL
322
2020
672
Sol
Tempe
AZ
225
2010
640
West 6th
Tempe
AZ
375
2009
629
The Mix Residences
Atlanta
GA
324
2018
604
Latitude
Champaign
IL
324
2016
604
Vertex
Tempe
AZ
220
2015
600
Aspen Heights Auburn
Auburn
AL
208
2012
600
University Park
Boca Raton
FL
159
2015
598
Moontower
Austin
TX
166
2020
567
The Indy
Marietta
GA
172
2019
543
The Standard
Saint Louis
MO
163
2015
465
Lothlorien
Seattle
WA
146
2007
157
The Alabama
New York
NY
98
1903
142
STUDENT HOUSING SALES
NUMBER OF BEDS UNDER CONSTRUCTION | BY REGION
WEST COAST
37
PROPERTIES
22.7K TOTAL BEDS
ROCKY MTN.
15
PROPERTIES
MIDWEST
8.1K
29
TOTAL BEDS
PROPERTIES
8.3K
TOTAL BEDS
NORTHEAST
34
PROPERTIES
17K
TOTAL BEDS
SOUTHEAST
80
PROPERTIES
TEXAS / OK.
20
PROPERTIES
8.9K
TOTAL BEDS
36.5K TOTAL BEDS
STUDENT HOUSING PIPELINE BREAKDOWN | BY REGION By the Numbers
Pipeline Breakdown Overview The pipeline for purpose-built student housing consists of 215 properties in all phases of construction. These properties comprise a total 101,470 beds. One year ago, 253 properties representing 99,921 beds were under construction nationwide. The largest share of properties in the pipeline is in the Southeast region, where 80 properties representing 36,469 beds are located. Additionally, 78 properties are in various stages of planning / permitting nationwide, representing a total 45,612 beds.
40,000
30,000
20,000
TOTAL BEDS
10,000
0 WEST COAST
Under Construction
ROCKY MTN.
Breaks Ground in 2021
MIDWEST
NORTHEAST
TEXAS/OK.
SOUTHEAST
Breaks Ground After 2021
STUDENT HOUSING ONAND OFF-CAMPUS BEDS+
WEST COAST
ROCKY MTN.
MIDWEST
NORTHEAST
TEXAS/OK
SOUTHEAST
TOTAL
Under Construction*
22,672
8,162
8,299
17,022
8,846
36,469
101,470
Breaks Ground in 2021**
10,067
1,450
8,789
4,396
208
7,435
32,345
Breaks Ground After 2021***
2,858
-
1,072
1,874
-
5,303
11,107
Grand Total
35,597
9,612
18,160
23,292
9,054
49,207
144,922
+Does not include student competitive housing *Under construction and under construction / lease-up stages **In planning stage where a start date in 2021 is indicated, according to RealPage, subject to change ***In pre-planning stage where a start date after 2021 is indicated, according to RealPage, subject to change per RealPage, as of February 1, 2021
STUDENT HOUSING PIPELINE | TOP 50 The table below depicts the top 50 universities by bed count with purpose-built student housing projects currently under construction. SCHOOL
TOTAL BEDS
University of California - Los Angeles
4,060
University of Texas at Austin
3,945
University of California - Davis
3,550
University of Washington
3,459
University of Maryland
2,831
University of Nevada - Reno
2,531
Appalachian State University
2,219
Georgia Institute of Technology
2,066
Cornell University
2,000
Virginia Tech
1,952
University of Florida
1,917
University of Alabama
1,714
University of Illinois - Urbana-Champaign
1,672
University of Georgia
1,555
University of California - Riverside
1,500
Clemson University
1,453
Arizona State University
1,356
University of Arkansas
1,334
University of Oregon
1,308
Rochester Institute Of Technology
1,281
California State University - Sacramento
1,160
University of California - Irvine
1,050
Princeton University
1,020
Stevens Institute of Technology
994
University of Arizona
960
Missouri State University
958
University of North Carolina - Wilmington
948
Western Washington University
913
Louisiana Tech University
912
University at Buffalo - State University of New York
903
University of California - Merced
885
Tulane University
882
Louisiana State University
881
University of Alabama at Birmingham
879
Texas State University
847
George Mason University
825
East Carolina University
804
Michigan State University
792
Washington State University
752
Georgia State University
742
University of Miami
736
University of North Carolina - Charlotte
727
Pennsylvania State University
725
Auburn University
715
Texas A&M University Texas Medical Center
714
Loyola Marymount University
713
Tennessee State University
700
Vanderbilt University
700
Indiana University
693
Kennesaw State University
681
Source: RealPage. Student housing (no student competitive) on- and off-campus under construction or under construction / lease-up stage, as of February 1, 2021.
STUDENT HOUSING PIPELINE | ENROLLMENT PROJECTION The table below depicts the top 50 universities by bed count with purpose-built student housing projects currently under construction. Enrollment Projection Overview These 12 universities have the greatest disparity between the projected five-year growth in enrollment and planned new student housing development. There are many local factors that can lead to slowdown in student housing development, such as: temporary moratoriums on development, enrollment decrease, and uncontrollable socioeconomic events. While no attempt is made at estimating the impact of supply-demand imbalances on property values near these or any other universities, investors should be aware of the potential for outsized price appreciation at existing properties near universities where a shortage of student housing is present or expected.
FIVE-YEAR ENROLLMENT CHANGE PROJECTION AND STUDENT HOUSING PIPELINE DISPARITY
Source: RealPage. Enrollment estimates and student housing (no student competitive) on- and off-campus under construction and at various stages of the planning / permitting process as of February 1, 2021. Does not include partially completed properties under lease-up. Total enrollment at some of these universities may include satellite campus and online enrollment.
FASTEST-GROWING FLAGSHIP UNIVERSITIES | 2020
TOP 5
2018-19 GROWTH RANK SCHOOL 1 Georgia Institute of Technology
Y-O-Y CHANGE 3,768
2018 FALL ENROLLMENT 32,722
2019 FALL ENROLLMENT 36,490
FIVE-YEAR PROJECTION 4,034
2
Kennesaw State University
2,387
35,420
37,807
790
3
University of Illinois - Urbana-Champaign
1,903
49,702
51,605
4,518
4
Utah Valley University
1,797
39,931
41,728
3,667
5
Arizona State University
1,701
51,585
53,286
2,561
6
University of California - Riverside
1,626
23,922
25,548
2,326
7
Florida Atlantic University - Boca Raton
1,624
21,562
23,186
-389
8
University of California - Davis
1,594
38,035
39,629
2,166
9
University of Michigan
1,374
46,716
48,090
3,345
10
Appalachian State University
1,225
18,055
19,280
656
11
Florida State University
1,213
41,005
42,218
706
12
University of California - Berkeley
1,194
42,501
43,695
4,120
13
University of Southern California
1,190
47,310
48,500
4,372
14
Purdue University
1,140
43,411
44,551
2,179
15
University of North Texas
1,105
38,087
39,192
2,176
16
University of Colorado - Boulder
1,102
36,548
37,650
2,509
17
University of Central Florida
951
68,081
69,032
4,483
18
University of Wisconsin - Madison
906
44,411
45,317
-84
19
University of California - Irvine
876
36,032
36,908
4,198
20
Clemson University
871
24,951
25,822
3,080
21
Baylor University
826
17,207
18,033
214
22
North Carolina State University
825
35,479
36,304
-5
23
University of Texas at Dallas
788
28,755
29,543
4,107
24
Louisiana State University
774
30,987
31,761
606
25
University of North Carolina - Wilmington
752
16,747
17,499
1,776
26
Oregon State University
733
30,986
31,719
1,861
27
Boise State University
732
25,540
26,272
1,259
28
University of Massachusetts
711
26,316
27,027
1,273
29
University of Arizona
701
45,217
45,918
2,967
30
University of Nevada - Las Vegas
697
30,474
31,171
2,082
31
University of Cincinnati
691
38,062
38,753
2,951
32
California State University - Long Beach
618
37,457
38,075
2,344
33
University of South Carolina
569
34,795
35,364
2,563
34
University of Tennessee
566
28,894
29,460
1,075
35
University of North Carolina - Pembroke
561
7,137
7,698
684
36
George Mason University
547
37,316
37,863
2,009
37
Jacksonville State University
542
8,479
9,021
6
38
Virginia Tech
536
34,181
34,717
2,470
39
Texas Tech University
533
38,209
38,742
2,910
40
Western Carolina University
528
11,639
12,167
583
41
University of Florida
525
52,218
52,743
3,459
42
San Jose State University
514
32,423
32,937
2,530
43
University of California - San Diego
509
37,887
38,396
4,245
44
University of Miami
480
17,331
17,811
610
45
University at Buffalo - State University of New York
420
31,503
31,923
991
Total enrollment at some of these universities may include satellite campus and online enrollment.
STUDENT ENROLLMENT 5-YEAR OUTLOOK | BY STATE Five-Year Outlook Overview These 12 states are projected to have combined enrollment gains totaling 189,900 students in the next five years. Approximately 82,300 of the 189,900 new students are expected to enroll at non-Power 5 schools. This represents 43.3% of total enrollment, a 5.5% increase from last year’s projected level of enrollment at non-Power 5 schools. Source: RealPage University Top 175; projections subject to change.
SUPPLY AND DEMAND VARIATION, TOP 50 SCHOOLS | 2020 RANK
SCHOOL
2019 FALL ENROLLMENT
2020 TOTAL SUPPLY (BEDS)*
HOUSING SHORTFALL
EFFECTIVE RENT**
2019-20 TUITION
1 2 3 4 5 6 7 8 9 10 11 12 13 15 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Utah Valley University Arizona State University - Tempe Campus Florida International University California State University - Long Beach University of Central Florida University of California - Berkeley California State University - Northridge University of California - Davis University of California - Los Angeles University of Illinois - Urbana-Champaign University of Colorado - Boulder University of Iowa Oregon State University Pennsylvania State University Washington State University George Mason University Indiana University University of Cincinnati Brigham Young University Iowa State University California State University - Fullerton Ohio State University University at Buffalo - State University of New York Boise State University Kent State University West Virginia University University of California - Santa Barbara Purdue University Missouri State University San Jose State University Virginia Tech University of Utah Rutgers University - New Brunswick University of North Texas Kansas State University University of Wisconsin - Madison Indiana University - Purdue University Indianapolis University of Memphis University of California - San Diego University of Michigan University of Massachusetts Utah State University Northern Arizona University California State University - Sacramento Michigan State University Illinois State University Grand Valley State University - Allendale Campus University of Minnesota University of Wisconsin - Milwaukee University of Connecticut
41,728 53,286 51,688 38,075 69,032 43,695 38,391 39,629 45,742 51,605 37,650 31,240 31,719 47,223 31,607 37,863 43,260 38,753 34,317 33,391 38,964 61,391 31,923 26,272 27,716 26,839 26,314 44,551 23,453 32,937 34,717 32,818 50,175 39,192 21,719 45,317 29,537 21,685 38,396 48,090 27,027 17,279 30,736 31,156 49,809 20,878 24,033 51,327 23,992 22,547
14,439 16,877 7,178 39,272 15,160 12,570 15,375 23,118 29,488 16,694 10,402 11,409 27,627 12,030 19,610 25,995 21,961 18,804 17,991 23,595 46,246 17,223 12,148 13,766 12,998 12,494 30,990 9,991 19,509 21,434 19,550 36,947 25,993 8,669 32,751 17,206 9,381 26,192 36,185 15,379 5,788 19,342 20,154 38,891 9,990 13,190 40,567 13,815 12,509
41,728 38,847 34,811 30,897 29,760 28,535 25,821 24,254 22,624 22,117 20,956 20,838 20,310 19,596 19,577 18,253 17,265 16,792 15,513 15,400 15,369 15,145 14,700 14,124 13,950 13,841 13,820 13,561 13,462 13,428 13,283 13,268 13,228 13,199 13,050 12,566 12,331 12,304 12,204 11,905 11,648 11,491 11,394 11,002 10,918 10,888 10,843 10,760 10,177 10,038
$565 $836 $996 $1,597 $800 $2,223 $1,411 $1,071 $2,237 $641 $1,180 $643 $739 $751 $574 $1,172 $636 $878 $471 $554 $1,335 $855 $668 $747 $596 $550 $1,461 $624 $544 $1,922 $632 $976 $1,146 $689 $456 $842 $859 $512 $1,665 $967 $807 $460 $824 $928 $632 $552 $537 $1,152 $1,097 $1,210
$5,122 $10,710 $6,168 $5,742 $6,368 $11,442 $5,742 $14,490 $11,442 $12,036 $10,728 $8,073 $9,840 $17,416 $9,953 $9,060 $9,575 $9,322 $5,790 $8,042 $5,742 $10,662 $7,070 $5,532 $11,131 $8,976 $11,442 $9,208 $6,540 $5,742 $14,420 $8,253 $12,230 $8,403 $6,540 $10,725 $8,580 $8,208 $12,570 $15,230 $15,791 $6,549 $10,650 $5,742 $14,460 $11,524 $12,860 $13,318 $8,091 $13,724
*Represents the total of beds in on-campus housing (university owned) and off-campus housing (purpose-built) and student-competitive housing. The bed counts were obtained from Axiometrics sampling of the total number of these apartment communities. Both the total number of apartment communities and the proportion of properties sampled vary by market. **Weighted average monthly effective rent per bed from September 2019 to August 2020. Only includes off-campus purpose-built (not student-competitive) properties that have been stabilized for two or more consecutive periods.
TOTAL ENROLLMENT AND SUPPLY | BY SIZE OF SCHOOL Total Enrollment and Supply Overview Among RealPage’s Top 175 universities that have enrollment exceeding 30,000 students, the total of on-campus and off-campus student housing beds typically accommodates approximately 35% of students enrolled, the lowest number among all groups shown in the graph. At Power 5 universities, the housing needs of about 42% of students are met by on- and off-campus housing. Overall, the greatest disparity between off-campus and on-campus housing is seen at universities with at least 50,000 students. There is an influx of nearly 60,000 off-campus beds at these universities. These statistics show the maximum number of beds available on-campus and do not account for the dedensification needs brought on by the Covid-19 pandemic. It is likely that some dedensification measures will be permanent, increasing this gap and increasing the off-campus demand.
ENROLLMENT
TOTAL OFFCAMPUS BEDS*
TOTAL ONCAMPUS BEDS**
TOTAL ENROLLMENT***
CUMALTIVE COUNT
At least 50,000 Students
145,711
86,283
595,657
10
At least 40,000 Students
270,297
224,578
1,366,670
27
At least 30,000 Students
504,222
450,602
2,742,411
66
At least 25,000 Students
626,386
572,425
3,348,394
88
At least 20,000 Students
723,187
673,852
3,882,523
112
At least 15,000 Students
769,781
740,334
4,181,635
129
*Fall 2020; student-competitive properties not included **Fall 2020 ***Fall 2019 enrollment Axiometrics University Top 175. Some of the top 175 schools had enrollment below 15,000 students.
BERKADIA STUDENT HOUSING TEAM Kevin Larimer
Senior Managing Director
Genna Jago
Marketing Project Manager
248.341.3305 | kevin.larimer@berkadia.com
Peter Benedetto
Senior Managing Director
Brandon Buell
Senior Managing Director
248.208.3462 | peter.benedetto@berkadia.com
346.444.8982 | brandon.buell@berkadia.com
Aaron Moll Director
Nick Swoboda Financial Analyst
248.208.0529 | aaron.moll@berkadia.com
BERKADIA STUDENT HOUSING | HISTORIC CLOSINGS
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